The growing popularity of cable network shows about flipping houses is only natural. Flipping houses with cable network personalities is fun, exciting, and people love to watch. In an hour or so, we see planning, contractor coordination, trades people turning a wreck into a jewel, and all with a nice profit at the end. I think it's great entertainment and a wonderful story of the evolution of a house. The biggest problem with the flipping shows is that many people are captivated and want to get into flipping houses based on what they see. Unfortunately, reality TV isn't so much the reality we hope it to be.
At the show's beginning, we're amazed that these flippers are even taking on this project, as this foreclosure home is a mess! From holes in walls to missing plumbing and electrical fixtures, it's a nightmare for the average viewer. Our experts assure us that this house is a profit opportunity with the right knowledge and smart shopping and contracting choices.
It's easy to get caught up in the excitement of selecting just the right fixtures and home decor items to transform an ugly foreclosure house into the home that retail buyers want to own or renters will fight over. We're vicarious shoppers, buying granite countertops, new flooring and super-efficiency appliances. I bet there are hyper-analytical accountants watching these flipping shows and wearing out their calculators trying to make the numbers work.
From the kitchen cabinets to the dumpster outside and the insulation, there's a secret you're not let in on. Almost all of that sheetrock that goes onto the wall, the two-by-fours, and the carpet and tile are paid for by the show sponsors. In so many cases you'll see the advertisement or the name of that company and they're getting well placed advertising. I think it's great for everybody. However, without a full disclosure of what was purchased and what was free, starting a house flipping project based on what we see in these shows is a sure way to take a nice bank balance and flip it upside down!
In most cases, these TV flippers are successful real estate investors and have the knowledge, but you can't be sucked in by the glory of what you see on a reality show. I've heard from so many people who went into flipping with a lot of excitement from watching these half hour or hour long flipping shows. Unfortunately, many of them share some real horror stories with me about rushing into their first project and getting themselves into trouble.
The compressed timeline of a flipping project on TV leaves out weeks or months of hard work, buying decisions, cost overruns and surprise problems that are a part of every house renovation undertaking. This isn't saying all flipping people on TV are intentionally misleading viewers. It's saying they're not educating, they're entertaining. If you're entertained, and most of us are when we watch these shows, it may lead you to start your real estate flipping business. That's great, but there is some preparatory information-gathering you'll need to do first.
If you have a desire to flip or buy real estate, get a good education in what's needed to understand the actual price you have to pay. Learn the amount of time it'll take to actually rehab. Get the knowledge you need to calculate the costs to make the home rent ready, or retail ready, which are two completely different strategies. In one you're selling to a retail buyer who wants to realize their dream of home ownership. In the other you're selling to a sharp real estate investor who will be buying solely based on the "numbers."
I love the fact that real estate is cool again. When the market crashed everybody was down on it. The markets turned and now everyone's excited. Just be prepared. Get the education, and jump in!
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